Big four keeping $7bn from homebuyers, study shows

A new research has revealed that the country’s big four banks have kept about $7bn from their variable rate home loan customers since November 2011 – and it all accumulated by not passing on the full Reserve Bank of Australia’s cash rate cuts.

“ANZ, Commonwealth Bank, NAB and Westpac – will have each held back 0.37 percentage points of the Reserve Bank's 2.50 percentage points of cash rate drops on average from their standard variable interest rates,” the report by finder.com.au stated.

NAB kept the most with 0.46 percentage points, followed by Commonwealth Bank and Westpac which both kept 0.34 percentage points. The lowest was ANZ with 0.33 percentage points.

"The big four banks hold 84% of home loan market share of all banks monitored by the Australian Prudential Regulation Authority (APRA). And it's estimated that 70% of all mortgage holders have a variable home loan according to finder.com.au," said Michelle Hutchison, the site’s Money Expert.

“So when the big four banks hold out on passing on rate cuts, it's going to hit most households with a mortgage.”

As of December 2014, all home loans financed through the big four banks have amounted to $1.1tn.

Commonwealth Bank has the biggest home loan share with over $354bn in Australia, including both owner-occupied and investment home loans. The bank also has the biggest share for owner-occupied home loans, with $231bn.

Westpac, on the other hand, has the biggest investment home loan book worth over $145bn.

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